Concerns lead to pension setback

Reps. Stern, Fleck vote to send reform bill back to committee

July 3, 2014

A bill on pension reform was voted back to its committee Tuesday, though some officials still have concerns about the plan.

House Bill 1353 was voted to the House Health and Human Services Committee by a vote of 107-96. Locally, Rep. Jerry Stern, R-Martinsburg, and Rep. Mike Fleck, R-Huntingdon, voted in favor of returning the bill to committee.

Rep. John McGinnis, R-Altoona, voted to send the bill to the floor. He is a sponsor listed on the reform proposal.

Wednesday, in a debate on the floor, House Majority Leader Mike Turzai, R-Allegheny County, said, in an attempt to save the bill, that pension reform likely would not be an issue the House focuses on until the fall. Stern said this makes Tuesday's vote essentially a moot point.

Stern said he is in favor of pension reform, but he has some concerns about the measure, which is spearheaded by Gov. Tom Corbett. He said it doesn't tackle the state's unfunded liability, which was $47 billion at the end of 2012 and is expected to grow to more than $65 billion by 2018, according to the Commonwealth's website.

Stern said the governor's plan would encourage school districts to raise taxes.

"We need to actually reform the pension system and not kick the can down the road, like the proposal that was before us," Stern said. "I'm supportive of pension reform, but I didn't feel like the proposal before us was taking care of the problem."

Fleck could not be reached for comment as of press time Wednesday.

Corbett is still evaluating the state budget, which was presented to his desk earlier this week. He said at a press conference Wednesday that his decision could be pushed into next week.

In a statement Monday, he indicated he would like the Legislature to send him "meaningful pension reform" before making a decision on the budget plan.

"The budget I received tonight makes significant investments in our common priorities of education, jobs and human services. It does not address all the difficult choices that still need to be made," Corbett said in the statement.

"It leaves pensions, one of the largest expenses to the commonwealth and our school districts, on the table, leaving the weight on Pennsylvania taxpayers and perpetuating the tug of war over state funding every single year."

He has until July 11 to sign the budget.

Stern said that, in light of Wednesday's discussions on the House floor, there have been promises that other plans and possible changes to the current pension proposal will be examined.

He said that members have plans that would address the unfunded liability, his main concern. Stern said also said that representatives would like to bring the major stakeholders together during the summer for meetings and hearings to discuss the next steps.

Despite Tuesday's vote being a blow to his pension plan, in a statement Corbett commended Turzai and other representatives for Wednesday's discussions. In a statement, he said the decision "demonstrates that we can set partisan politics aside."

"This is only the first step, but it's a critical one," Corbett said in the statement. "I urge the full House to side with taxpayers and give them much-needed property tax relief through meaningful pension reform."